Published: June 16, 2020
The Louisiana Senate Revenue and Fiscal Affairs committee approved legislation to give the gaming industry an $83 million tax break over five years after the major hit it took from the COVID-19 shutdown.
Senate Bill 5 would allow each casino to give customers $5 million in free promotional play wagers without having to pay state taxes on those amounts. Anything above $5 million would be taxed at the normal rate, 21.5 percent.
The tax break would cost the state $11.2 million in revenues in the next fiscal year, starting July 1.
The Legislature is planning to cut spending on higher education by $21 million as it struggles to balance next year’s budget, and the added revenue losses from this bill and others aimed at helping businesses recover from the virus shutdown could force more budget cuts.
In May, the Senate committee rejected a more costly resolution to suspend taxes on all promotional play wagers in the gaming industry. That would have cost the state $29 million in tax revenues next year and $217.9 million over five years.
A promotional play wager is a marketing tactic used by casinos and race tracks nationwide by which the casino sends a potential customer a voucher for a set amount of money to encourage that potential customer to come to the casino. Ultimately, customers gamble from their wallets and make ancillary purchases from on-site bars and restaurants.
State Police reports that promotional play wagers accounted for approximately $251 million or about 10% of gaming operator revenue in 2019.
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